A survey conducted by Credit Research Foundation (CRF) in partnership with NACHA-The Electronic Payments Association reveals that credit and account receivables professionals expect that by 2020, Automated Clearing House (ACH) transactions will overtake cheques as the leading form of payment from business customers.
At present, almost 50% of payments are made by cheque (down from 63% in 2014), while ACH accounts for 32% (up from 22%). Card payments are also up (11%, from 8%), as are cash and wire (8%, from 7%).
According to participants in the poll, by 2020 ACH will account for 45% of payment, cheques 34%, cards 12.5%, and cash and wire 8.5%.
The survey also looked into reasons for the changes in payment methods. The leading cause according to participants was ‘internal factors’ (29%), followed closely by improvements in technology (28%). Customer push was also a significant factor (23%), while cost (13%) and card/bank push (7%) were considered less impactful.
The predicted change is a good thing for credit and account receivables (and may represent a bit of wishful thinking on their part), as 80% of them said that ACH was their preferred method of receiving payment.
However, it’s slower to catch on with customers – 45% of participants in the survey said that some of their customers aren’t able to pay by ACH, while 34% said that their customers are able to use ACH but do so incorrectly, failing to send proper remittance with the payment. 21% said that their organisations did not have the resources or systems necessary to use it.
“The survey clearly shows that there is great interest, use and opportunity in ACH payments,” said Rob Unger, Senior Director, Corporate Relations and Product Management, NACHA. “Continued education, exploration of new tools and services like robotic automation of cash application, and leveraging new tactics, such as effectively providing education and marketing ACH to customers, will help break down the barriers to adoption and allow businesses to reap the benefits ACH payments provide.”